The financial health of Southwest Memorial Hospital is stable despite setbacks from the coronavirus pandemic, officials report.
Southwest Health System received $5.8 million in federal Cares Act funding, and $5 million from the Paycheck Protection Program, said CEO Tony Sudduth.
The federal aid has allowed Southwest Health to weather the pandemic storm.
“Our patient volume was down in May and June, but with the supplemental aid we are in a strong financial position,” Sudduth said.
The hospital had 1,974 patient days January through August 2020, compared with 2,342 patient days through August 2019.
The Emergency Department saw 7,840 patients through August, compared with 9,160 visits during the same period in 2019.
Year-to-date patient revenues were down $5 million by August when compared with last year at the same time, Sudduth said.
“Fortunately, the federal stimulus money offset that,” he said.
As part of the agreement for keeping PPP funds, no employees were furloughed.
Cash reserves, a measure of hospital fiscal health, have also rebounded since a 2018 financial crisis that triggered restructuring and a forbearance agreement with investors.
SHS currently has 103 days cash on hand, or about $17 million. That is up from 50 days in July 2019, and a low of 15 days in April 2018.
SHS is required to keep enough cash reserves to operate the hospital for at least 81 days. It takes about $165,000 per day to operate the hospital.
Telemedicine visits have increased since the pandemic began. By August, there were 28,183 telemedicine appointments, and in all 2019 there were 28,449.
“More telemedicine has improved patient access and reduced waiting times,” Sudduth said.
He said new regulations because of the pandemic now allow hospitals to be reimbursed for telemedicine visits.
Medical services have restarted from previous pandemic shutdowns, and the returning volume of orthopedic surgeries has helped to improve the bottom line, said CFO Rick Shrader.
“August was one of the strongest months we’ve seen,” he said.
Year-to-date revenues over expenses at Southwest was $773,000 as of August.
As a private nonprofit, SHS leases operations of the hospital from the Montezuma County Hospital District, which owns the campus.
SHS is required under the lease agreement to keep financial ratios at certain benchmark levels based on comparable hospitals.
The most recent 2020 quarterly report shows the return on assets and acid test ratios are above the 37.5 percentile benchmark for comparable hospitals. The current ratio is below the 37.5 percentile benchmark, but above the 25th percentile for comparable hospitals.
If improvement is not made, or the ratios drop below the 25th percentile, the Montezuma County Hospital District can take corrective action, according to the lease.